Industrial Sentiment Clouds Economic Climate

The index of current situation assessments for the overall economy rose by 0.5 points in December, but remained in negative territory at –6.0 points. In the manufacturing sector, which is particularly important for the economy, the situation index fell noticeably (–4.5 points) and, at –27.3 points, was well below the zero line that separates positive from negative situation assessments. The situation index also fell in the construction industry (–1.4 points) and, at –3.3 points, was again slightly lower in the sceptical range. In the services sector, on the other hand, the situation index rose (+3.2 points) and was higher in positive territory at 3.6 points. In the retail sector, the situation index gained 4.0 points and stood at 2.8 points above the zero line.

The index of business expectations for the overall economy fell in December (–4.3 points) and, at –6.6 points, was below the zero line that separates negative from positive economic expectations. In the retail sector, the expectations index rose slightly (+0.4 points), but remained in the sceptical economic expectations range at –14.0 points. In the services sector, the expectations index lost 2.4 points and was again close to the zero line at 0.9 points. There was also a deterioration in the construction industry (–2.5 points). At 3.3 points, the expectations index remained slightly above the zero line, but expectations for construction activity deteriorated once again. In the manufacturing sector, the expectations index collapsed in December (–10.3 points) and, at –20.8 points, was once again well within the range of pessimistic economic expectations. Production and business situation expectations in particular fell significantly.